WASHINGTON — House Democrats said Tuesday they had reached an agreement with the White House to strengthen labor, environmental, pharmaceutical and enforcement provisions in President Donald Trump’s North American trade pact, a significant development that makes it all but certain that the president’s signature trade deal will become law.
The agreement, announced Tuesday by Speaker Nancy Pelosi, made for an odd moment, coming as the same group of House Democrats moved closer toward impeaching the president. Pelosi of California said she would allow a revised U.S.-Mexico-Canada Agreement to move forward in the House, handing the administration one of its biggest legislative victories less than an hour after she announced the articles of impeachment against Trump.
Pelosi went directly from a news conference on impeachment to another on the trade deal, where she and top Democrats, including Rep. Richard E. Neal of Massachusetts, touted concessions they had secured in closed door negotiations with the administration.
“We’re declaring victory for the American worker,” Pelosi said. “It is infinitely better than what was initially proposed by the administration.”
The timing of the handshake agreement offers Trump a crucial victory to tout on the campaign trail during his reelection bid and House Democrats tangible proof that they are able to legislate while preparing to vote on charges of abuse of power and obstruction of Congress against the president.
Pelosi repeatedly rebuffed Republican suggestions that Democrats had timed the announcement to try and minimize any negative fallout from the impeachment proceedings.
“Not any one of us is important enough to hold up a trade agreement that is important for American workers,” she said.
The administration agreed with Canada and Mexico on revisions to the North American Free Trade Agreement one year ago, but the deal requires the approval of Congress, including the Democratic-controlled House. Pelosi and her colleagues have used that vote as leverage to secure long-sought policy changes to a long-maligned trade deal.
“Make no mistake,” Rep. Earl Blumenauer, D-Ore., said Tuesday. “This is a Democrat’s agreement that we fought for, and it’s going to be the template going forward for writing new trade agreements.”
Among the biggest wins was an agreement to strip out intellectual property protections for the pharmaceutical industry, which Democrats warned could undermine efforts to make health care more affordable. Democrats also convinced the White House to strengthen the deal’s enforcement provisions, and obtained commitments to ensure Mexico is adhering to labor reforms.
Those changes were critical to winning the support of labor unions, including the influential AFL-CIO, which endorsed the revised pact just moments before Pelosi’s announcement.
In fact, the revised deal addressed so many of the Democrats’ concerns that some Republicans appeared skeptical of the final agreement and suggested that Trump’s top trade adviser, Robert Lighthizer, had given away too much.
Sen. John Cornyn, R-Texas, voiced concern that Lighthizer had potentially spent more time talking with House Democrats than Republicans on the final product. And Sen. Patrick J. Toomey, R-Pa., one of the most ardent critics of the deal, railed against both the original deal and the new changes, including removal of the pharmaceutical provision.
“It’s clearly moved way to the left,” Toomey told reporters. “It seemed to be just a one-way direction in the direction of Democrats.”
Trump, who spent weeks blaming Pelosi for standing in the way of a trade deal that he said would help workers, touted the progress on Twitter on Tuesday morning. “Looking like very good Democrat support for USMCA. That would be great for our Country!”
In a statement, Lighthizer called the announcement a victory for Trump.
“After working with Republicans, Democrats, and many other stakeholders for the past two years we have created a deal that will benefit American workers, farmers, and ranchers for years to come,” he said.
The changes must now be woven into implementing legislation that the House and Senate will both vote on. The pact will also need to secure the president’s signature and the final approval of the Mexican and Canadian legislatures.
Neal said he remained hopeful that the House could vote on the agreement before the end of the year. Sen. Mitch McConnell, R-Ky., the majority leader, said that the Senate would not bring the deal for a vote before Dec. 20, when lawmakers are scheduled to leave for a holiday break.
“That’ll have to come up, in all likelihood, after a trial is finished in the Senate,” he said, referring to the impeachment proceedings.
Lighthizer on Tuesday briefed groups of House and Senate Republicans by phone on the changes. While some expressed concern, most Republicans appeared to maintain their support for the new trade pact, even with the new changes negotiated by Democrats.
Sen. Rob Portman, R-Ohio, declared “relief” in an interview, and noted that such a compromise in a divided government “is a rare feat around here, and we should celebrate it.”
And as Neal left the news conference, Rep. Steve Scalise of Louisiana, the Republican whip, shook his hand. A spokeswoman said Scalise had promised Lighthizer strong Republican support for the deal.
“There’s a Republican leader saying it was good,” Neal said as he entered an elevator. “That wasn’t staged.”
The agreement came as a huge relief to industries that have grown up around NAFTA and rely on tariff-free trade across Canada, Mexico and the United States. The lack of movement in Congress, combined with Trump’s threats to walk away from the original NAFTA pact, had created crippling uncertainty among businesses.
“This is finally good news on the trade front after a long, hard year,” said Rufus H. Yerxa, president of the National Foreign Trade Council, which represents major exporters. “We believe this agreement will further strengthen the North American region, bringing about the commercial stability and certainty that our companies need to remain competitive in the global economy.”
The administration and Republicans in both chambers have hammered Pelosi and her caucus to take action. Even within Pelosi’s majority, several moderate members and a number of the freshmen who flipped Republican-held seats in 2018 had begun pressuring leadership for a vote on the pact before the end of the year.
The deal announced Tuesday offered Pelosi and her core allies justification for the delay by establishing what she said would be a legacy agreement that sets the standard for future trade deals.
In addition to updating rules for digital commerce, Trump’s USMCA raised the threshold for the proportion of a car’s value that must be made in North America in order to qualify for the pact’s zero tariffs. It also rolls back a special system of arbitration for corporations long opposed by Democrats.
One of the most significant revisions will roll back protections for new pharmaceutical products, in particular an advanced class of drugs called biologics, which were initially given 10 years of patent protection from cheaper alternatives. It also removed language that would ensure patent protections when drug companies find new uses for their existing products, a process known as “evergreening.”
Those changes are a big departure from past trade agreements, which sought to lock in stronger protections for intellectual property, long seen as a competitive advantage for the U.S. economy.
Protections for pharmaceutical companies became a stumbling block in negotiations over the Trans-Pacific Partnership, a 12-country trade deal negotiated by President Barack Obama. Drug protections helped sink the TPP and Trump pulled the United States out of the pact during his first week in office.
Blumenauer said the pharmaceutical revisions would “change the landscape” on trade agreements. “If we go back and review the other trade agreements we’ve had, they are replete with pharmaceutical protections,” he said. “This is a very significant shift.”
The drug industry was not pleased.
“The announcement made today puts politics over patients,” Stephen J. Ubl, president and chief executive of the Pharmaceutical Research and Manufacturers of America, said in a statement. “The only winners today are foreign governments who want to steal American intellectual property and free ride on America’s global leadership in biopharmaceutical research and development.”
The revisions also beefed up labor protections, especially in Mexico. While Mexican negotiators succeeded in rebuffing Democrats’ demand for American inspections of Mexican factories, they agreed to additional funding and oversight to ensure that Mexico proceeds with strengthening its labor laws and unions. The United States will also be allowed to block goods from specific Mexican factories if companies are found in violation of labor rules.
Democrats also said they had succeeded in bolstering enforcement of the trade pact by stripping out a provision — added by Lighthizer — which had curbed the ability of countries to bring disputes against one another.
In a loss for Pelosi, the pact will still contain certain legal protections that may shield online platforms like Facebook, Twitter and YouTube from some lawsuits over content posted by their users.
Pelosi acknowledged the inclusion of those provisions was a “disappointment,” adding, “I mean, I lost.”